95% myth

[forker]

Do you think that starting an ODT religion is going a step to far, I just feel the urge to worship now

 

[robster970]

Perhaps a cult?

 

[forker]

We can all shave our heads get matching ODT tattoos and most importantly, spread the word

 

[brettus]

maybe because Oanda pays interest ...which makes inactive accounts profitable ...

Right on the money! That's the reason.

 

[montmorencyt2w]

Some of the points made earlier in this thread reminded me of a comment made (more recently) by Simon, in the CS thread. He said something like the average losses of his customers was about half that of the industry as a whole. I think he attributed this partly to the mandatory stops policy and partly to the way they handle margins (effectively eliminating margin calls). He had also talked about this in a long interview on another site, a link to which I have posted on T2W from time to time (but do not have to hand). I suspect his comments also go for the other LCG-related oufits.

 

[tar]

Some of the points made earlier in this thread reminded me of a comment made (more recently) by Simon, in the CS thread. He said something like the average losses of his customers was about half that of the industry as a whole. I think he attributed this partly to the mandatory stops policy and partly to the way they handle margins (effectively eliminating margin calls). He had also talked about this in a long interview on another site, a link to which I have posted on T2W from time to time (but do not have to hand). I suspect his comments also go for the other LCG-related oufits.

He said 79% of his clients are losers , which is worse than many retail fx brokers ...

not sure where you get 95pc from (sounds like a disgruntled client of an SB company).

we have made many statements to our investors (and on this thread) stating that the average winning number of clients is 21pc. Slightly better than the 18pc of private clients trading on the CBOT/CME. not only this but winning clients (because they tend to last longer!) generally make more than 21pc of the trades.

in '08 i believe the number of winners fell a bit but i can assure you that this year the swing has gone the other way.

this is also confirmed in that during any given month of 21/22 trading days we (LCG) will have an average 4 to 5 losing days.

simon

http://www.trade2win.com/boards/spread-betting/16595-capital-spreads-710.html#post966098

 

[oiltanker]

i read somewhere 70% of people who open a restaurant 'blow up their account'.

hollywood only expect only a fraction of films to be successful. many film studios have gone bust.

people phased by 70% risk model need to work for the council or summit.

 

[TheBramble]

He said 79% of his clients are losers , which is worse than many retail fx brokers ...

He was being economic with the falsehood. 97-99% of his clients are losers.

 

[montmorencyt2w]

He said 79% of his clients are losers , which is worse than many retail fx brokers ...




http://www.trade2win.com/boards/spread-betting/16595-capital-spreads-710.html#post966098

Yes, and he also said (and I didn't remember it correctly):
http://www.trade2win.com/boards/spread-betting/16595-capital-spreads-796.html#post1331780

back for a comment

donovan5

i can understand this being annoying but the system was designed so that hardly any clients ever went into a negative balance AND more importantly that CS never had to make margin calls.

The practice of margin calling is always open to double meaning. In reality if you are losing so much money on a position that you are in need of a margin call then (frankly) you should be out of the position anyway! Having been in the industry as long as i have I can tell you that the biggest client losses have always been the ones where a margin call is made and met... then the client continues to pile more and more cash into a position to defend it against closure.

set against this is the undoubted fact that sometimes you get taken out on (or near) the lows. being a trader myself I find this very annoying.

The average revenue that CS makes from its clients is half, on a per/client basis, that made by our bigger competitors (those who give out this info). I truly believe that the main reason for this is the mandatory stop policy enforced by CS.

Simon

So what that means to me is that 79% of his clients may be losers, but on average they don't lose as much as customers at the competitor SB firms. So you can go broke more slowly at CS (and/or have more time to get your trading right).

 

[montmorencyt2w]

He was being economic with the falsehood. 97-99% of his clients are losers.

Do you have evidence of this?

 

[tar]

Yes, and he also said (and I didn't remember it correctly):
http://www.trade2win.com/boards/spread-betting/16595-capital-spreads-796.html#post1331780




So what that means to me is that 79% of his clients may be losers, but on average they don't lose as much as customers at the competitor SB firms. So you can go broke more slowly at CS (and/or have more time to get your trading right).

It could mean many things , for example it could mean his clients are smaller and bet small compared to IG clients , anyway shouldnt the revenue come from the spread and not from clients losses ?!

 

[meanreversion]

i read somewhere 70% of people who open a restaurant 'blow up their account'.

hollywood only expect only a fraction of films to be successful. many film studios have gone bust.

people phased by 70% risk model need to work for the council or summit.

Ah, I was about to recommend this post, but shouldn't it be "fazed" not "phased"?

Sorry!!

 

[montmorencyt2w]

It could mean many things , for example it could mean his clients are smaller and bet small compared to IG clients ,

Interesting point.

If it's that, then it would mean that even large customers lose, so tends to argue against the idea of the undercapitalised losing spreadbetter.

anyway shouldnt the revenue come from the spread and not from clients losses ?!

Yes, good point, but at least CS are getting less of that revenue than IG, so it could suggest that they are "straighter" than IG (or other large competitor (are there any?)).

 

[kwickwool]

The 95% myth is ******** to anyone entering into this? Would you base you decision on wether you can do something or not on a statistic? Like feck, no chance, it is irrelevant.

What is the only important factor here? It is for you as an individual to look at trading, all the many different perspectives and possibilities open to you and for you alone to calculate if you can make it work. If you can you can and you should be intelligent enough to be able to work that out, so who makes it is irrelevant, could be 1%, 5%, 10%, 50%, all that matters is you being clever enough to be able to work out if you are?

 

[montmorencyt2w]

Another way of looking at it is that you have a 5% chance of success (if the 95 figure is correct).

A 5% chance of making an income better than the average, possibly considerably bigger?
Those are not bad odds.

Probably much higher than making it big as an actor, say, or a musician, or as a painter, etc.


The real question is how long do you stick at it before you decide whether or not you, personally have any chance of making it? That is something only you can decide.

 

[kwickwool]

You cannot compare this to acting, painting or being a musician and are missing my point?

You can mathamatically and financially calculate if you can do this, if you can then you go ahead and do it, if you cannot they you do not. The percentage of survivers, winners, losers etc are irrelevant? You are not waiting for a break, someone to spot you, some PR, the right place at the right time etc etc etc as are so important with the above you mention, you alone can make it or not, no other requirements at all, that is the end all and bee all of it?????

No excuses for anyone with this, you against the markets, it is as face to face and as clear cut as you can get and no lucky breaks required or needed, you sink or swim. Simples.

G/L

 

[montmorencyt2w]

I don't think I have missed your point. The chances of an actor (say) making it big (in Hollywood, or on Broadway, or in the West End), are a lot less than 5% (I would estimate ... most actors are unemployed, most of the time). But if someone has the acting bug, would it stop them trying? No, not in the slightest. Just like the trader who believes in himself, whatever the odds.

 

[tar]

Interesting point.

If it's that, then it would mean that even large customers lose, so tends to argue against the idea of the undercapitalised losing spreadbetter.



Yes, good point, but at least CS are getting less of that revenue than IG, so it could suggest that they are "straighter" than IG (or other large competitor (are there any?)).

No it doesnt suggest CS is "straighter" we r talking about revenue from the spread now , it suggests IG clients r bigger and they bet big so the revenue is bigger , also u can bet actively with IG not like CS u will be on dealer even your size is 20pound/p , alos u have more instruments and shares to bet on with IG ,also IG has options trading and binaries , i told u it mean many things but the last thing it could mean that CS is honest and they dont take clients money because of their stop loss policy or margin policy , infact CS has the lowest "profitable traders" percentage compared to other FX brokers ...

 

[JRP2891]

He was being economic with the falsehood. 97-99% of his clients are losers.

I can't remember where i saw it on these boards, but someone made a good point of the quoted 20% making money regularly are in reality a much smaller number due to the large number of people that open accounts, blow-up and quit, and therefore can't be regular enough losers to be taken into account for these types of surveys. So perhaps 97%-99% of all people that have partaken is more accurate, although my feelings are that it's probably even higher if you're too include everyone who has dabbled for a few weeks. I'd also say that i was in those numbers for a significant amount of time as well, but you can get out of them in the end if you're willing to sacrifice and do anything, literally anything.

 

[tar]

I can't remember where i saw it on these boards, but someone made a good point of the quoted 20% making money regularly are in reality a much smaller number due to the large number of people that open accounts, blow-up and quit, and therefore can't be regular enough losers to be taken into account for these types of surveys. So perhaps 97%-99% of all people that have partaken is more accurate, although my feelings are that it's probably even higher if you're too include everyone who has dabbled for a few weeks. I'd also say that i was in those numbers for a significant amount of time as well, but you can get out of them in the end if you're willing to sacrifice and do anything, literally anything.

the 80% number is for losers across one quarter of the year it is not for who loses in a regular basis , so the numbers include every active account , new, old , the 75% includes everyone lost in one quarter ...